Brian Schade v. Ontario Sheet Metal Workers' Conference, 1983 CanLII 916

[1983] OLRB Rep. March 339

0207-82-R Brian Schade, Applicant, v. Ontario Sheet Metal Workers' Conference, Respondent, v. Culliton Brothers Limited, Intervener

BEFORE R.O. MacDowell, Vice-Chairman, and Board Members J. Wilson and H. Kobryn.

APPEARANCES: R. C. Sills, Q. C., and Brian Schade for the applicant; B. Fishbein, R. Belleville and R. Brown for the respondent; G. Grossman for the intervener.

DECISION OF VICE-CHAIRMAN R. O. MACDOWELL AND BOARD MEMBER J. WILSON; March 17, 1983

This is an application under section 57 of the Labour Relations Act which was adjourned pending a final decision in a related proceeding involving the same parties. (See Board File No. 2245-81-M, interim decision released March 17, 1982, reported at [1982] OLRB Rep. March 357; final decision released November 10, 1982, reported at [1982] OLRB Rep. Nov. 1602.) The circumstances giving rise to this application were reviewed in these earlier Board decisions. The details need not be repeated here. It will suffice to briefly sketch in the context in which the present proceeding arises. Reference will be made to the following provisions of the Labour Relations Act:
-(2) Any of the employees in the bargaining unit defined in a collective agreement may, subject to section 61, apply to the Board for a declaration that the trade union no longer represents the employees in the bargaining unit,

(a) in the case of a collective agreement for a term of not more than three years, only after the commencement of the last two months of its operation;

(3) Upon an application under subsection (1) or (2), the Board shall ascertain the number of employees in the bargaining unit at the time the application was made and whether not less than 45 per cent of the employees in the bargaining unit have voluntarily signified in writing at such time as is determined under clause 103(2)(j) that they no longer wish to be represented by the trade union, and, if not less than 45 per cent have so signified, the Board shall, by a representation vote, satisfy itself that a majority of the employees desire that the right of the trade union to bargain on their behalf be terminated.

-(2) Where an employer is represented by a designated or accredited employer bargaining agency, the employer shall be deemed to have recognized all of the affiliated bargaining agents represented by a designated or certified employee bargaining agency that bargains with the employer bargaining agency as the bargaining agents for the purpose of collective bargaining in their respective geographic jurisdictions in respect of the employees of the employer employed in the industrial, commercial and institutional sector of the construction industry referred to in clause 117(e), except those employees for whom a trade union other than one of the affiliated bargaining agents holds bargaining rights.

145.-(4) After the 30th day of April, 1978, where an affiliated bargaining agent obtains bargaining rights through certification or voluntary recognition in respect of employees employed in the industrial, commercial and institutional sector of the construction industry referred to in clause 117(e), the employer, the affiliated bargaining agent, and the employees for whom the affiliated bargaining agent has obtained bargaining rights are bound by the provincial agreement made between an employee bargaining agency representing the affiliated bargaining agent and an employer bargaining agency representing a provincial unit of employers in which the employer would have been included.

147.-(2) A provincial agreement is, subject to and for the purposes of this Act, binding upon the employer bargaining agency, the employers represented by the employer bargaining agency, the employee bargaining agency, the affiliated bargaining agents represented by the employee bargaining agency, the employees represented by the affiliated bargaining agents and employed in the industrial, commercial and institutional sector of the construction industry referred to in clause 117(e), and upon such employers, affiliated bargaining agents and employees as may be subsequently bound by the said agreement.

(emphasis added)

For ease of exposition, the parties herein will be referred to as "the applicant", "the union", and "Culliton" or "the Company". In referring to the respondent simply as "the union", the Board recognizes that, in reality, it is a designated employee bargaining agency which includes a number of local unions.

Culliton is a construction contractor which employs sheet metal workers. Its primary place of business is in the City of Stratford. Its normal sphere of operations is in Western Ontario. The applicant is one of five sheet metal workers who work out of the Company's Stratford location. These five employees have been employed by the Company for some years. The applicant, Brian Schade, for example, has been employed by the Company since 1974.
In the summer of 1976, Culliton was employing sheet metal workers on a construction project in the City of Cornwall — that is, outside its usual sphere of operations. Local 47 of the Sheet Metal Workers' International Association organized these employees, and on August 24, 1976, the Board certified Local 47 as the bargaining agent for all sheet metal workers employed by Culliton in Board Area No. 31 (the United Counties of Stormont, Dundas and Glengarry). As a result of that certificate, and an outstanding accreditation order, Culliton was automatically "plugged in" to an existing collective agreement between Local 47 and the Mechanical Contractors' Association of Ontario. That collective agreement was applicable in the industrial, commercial, institutional (ICI) and residential sectors of the construction industry, and thereafter covered Culliton's construction activities in those sectors in Board Area No. 31.
In 1978, the Legislature substantially amended the construction industry provisions of the Labour Relations Act. The 1978 amendments introduced province-wide bargaining by trade in the "ICI sector" of the construction industry through designated employer and employee bargaining agencies (essentially designated employer associations and province-wide councils of local unions). Thereafter, the relevant agreement binding Culliton's ICI operations in Board Area No. 31 was the province-wide ICI sheet metal agreement negotiated pursuant to the new statutory bargaining scheme.
Prior to May 1, 1980, the so-called provincial agreement was "provincial" in name only, since Culliton was bound to apply it only to the extent, and in areas, where a local union of the sheet metal workers had bargaining rights — that is, only in Board Area No. 31. The 1978 amendments changed the locus of bargaining, but did not affect union recognition or alter established bargaining rights which were still rooted in local Board areas. Because the Company was not normally active in Eastern Ontario, the unions bargaining rights in that area, and the provincial agreement, were largely irrelevant. But then, the Legislature passed section 17(2) of the Act. The effect of section 137(2) was to extend the union's bargaining rights beyond Board Area No. 31 and require Culliton to recognize the union and apply the collective agreement throughout Ontario.
Section 137(2) was part of a package of amendments designed to further consolidate and rationalize the bargaining structure in the construction industry, which, in some instances, despite the changes in 1978, was still fragmented and uneven in its application. As a result of the passage of section 137(2), wherever a local union had established a foothold in any geographic area in Ontario, an employer would be deemed to have recognized its sister locals throughout Ontario, which, as a group with the parent union, typically composed the provincial council of unions designated as the employees' bargaining agency. Thus, in the instant case, because Local 47 had established bargaining rights for sheet metal workers in Board Area No. 31, each of the other geographically-based local unions acquired bargaining rights in their areas by deemed recognition. In the result, the union had bargaining rights for all sheet metal workers employed by Culliton wherever they worked in Ontario.
Usually the contractor's "core employees" in his home base would already be unionized. The effect of section 137(2) was merely to extend bargaining rights to the hinterland where, previously, he had operated as a "non-union" contractor. Here, of course, the applicant and his fellow employees had never been, or wished to be, union members. From their point of view, the extension of the "academic" rights established by Local 47 in the Cornwall area meant that they were involuntarily swept into a collective bargaining relationship, and became represented by a trade union, which they had never previously joined or supported.
Section 137(2) does not address the situation of employees who are swept into the sphere of collective bargaining by its deemed recognition provisions. The extension of bargaining rights was not made contingent upon a showing of employee support. Moreover, since the collective agreement which became binding upon the Culliton employees by operation of section 137(2) made membership in the union a condition of employment, the swept-in employees (initially, pat least) would automatically be in breach of a material condition of employment. It remained to be determined whether the trade union could bring about their termination through enforcing the terms of the collective agreement, and further, whether the union was under any obligation to offer these employees membership or accept them into membership if they sought to join. These issues were canvassed in the two decisions of the Board in Board File No. 2245-81-M.
Board File No. 2245-81-M was an application by the union under section 124 of the Act to establish that Culliton was bound by the province-wide agreement and to require the Company to apply its terms — including the union security provisions — to the Company's activities in the Stratford area. It was launched in January 1982, almost 18 months after the statutory extension of bargaining rights upon which the union's application was based. The issues and arguments raised and resolved in that case are fully set out in the Board decisions, and need not be repeated here. The initial Board decision in March, 1982, established that the union did indeed have bargaining rights. The Board found that those bargaining rights had not been abandoned since 1976 and were extended by section 137(2) to Culliton's activities in Western Ontario. The second Board decision dealt with the application of the collective agreement, and the obligation of Culliton's employees to become union members.
The employees attended all of the hearings in Board File No. 2245-81-M. Initially they were without counsel. Subsequently, they retained their present solicitor who appeared for them at the second hearing and filed this termination application on their behalf. From their point of view, it was obvious that their rights, status, and wishes, were not the union's prime concern. In its pleadings, the union sought remedies which could mean their termination and replacement by union members. The employees did not understand the statutory framework and, not surprisingly, were unenthusiastic about union representation, and apprehensive about the consequences of the statutory extension of bargaining rights. Mr. Schade testified that he resented the fact that trade union representation was being thrust upon him, and that his first direct contact with the union was in the section 124 application where it sought to have him discharged.
After the first Board decision (in March) made it clear that the Company was bound by the collective agreement, the employees filed this termination application. They did not seek to become members of the union until after the second Board decision in November of 1982. That decision determined that the terms of the collective agreement did require them to join the union but that, in all the circumstances, they should be given a reasonable opportunity to do so. Given the uncertainties respecting their status and obligations, the Board was not prepared to direct their termination even though, to that point, neither the employees nor Culliton had been complying with the terms of the agreement. It was (and is) unnecessary to consider their position had they failed to seek, or been denied, membership (although it appears to be implicit in the Board's decision that the union would ordinarily be expected to offer membership as it eventually did here).
There is no dispute that, at all material times, the five employees who bring this termination application have been the only sheet metal workers employed by Culliton, or that they have been performing sheet metal work in the ICI sector. They were clearly doing "bargaining unit work" to which the province-wide sheet metal collective agreement applies. That is why the union asserted in its section 124 application that there had been a violation of that agreement. The applicant and his colleagues were sheet metal workers doing bargaining unit work in the ICI sector, but they were not members of the union as the agreement required. The Board accepted that proposition and directed that they seek membership in the union or face termination. In the instant case, however, the union asserts that because the employees were not union members at the time this termination application was made (i.e., April 26, 1982), they were not "employees in the bargaining unit defined in [the] collective agreement", and, therefore, not individuals having status to bring an application under section 57(2). This issue was raised in the section 124 proceeding, but was expressly left to be determined by this panel of the Board. In support of the union's contention, we were referred to the following cases: The Sudbury Star, [1978] OLRB Rep. Sept. 873; April Waterproofing Limited, [1980] OLRB Rep. Nov. 1577; Master Insulation Company Limited, [1980] OLRB Rep. Feb. 242 and [1980] OLRB Rep. May 744; Cooper Construction Company Limited, [1982] OLRB Rep. Aug. 1152; Beef Terminal (1979) Limited, [1981] OLRB Rep. March 244 and April 422; and Thomas Construction (Galt) Ltd., [19821 OLRB Rep. Nov. 1727. The union argues, in the alternative, that on the basis of the evidence before it, the Board cannot be satisfied that the statements in opposition to the union tendered by the applicant reflect the voluntary wishes of those who signed them.
The union's preliminary submission is based upon the opening words of section 57(2) and the terms of the province-wide sheet metal workers' agreement. The latter contains the following provisions:

ARTICLE 2 - DEFINITIONS

In this Agreement:

2.6 "employee" means a certified journeyman sheet metal worker or registered apprentice, as well as sheeter/decker, welder, sheeter's assistant and material handler engaged in the sheeting and decking segment of the sheet metal industry; recognized by the local union and employed in the shop or on the job site except as otherwise specifically provided in this Collective Agreement.

2.8 "member" means a certified journeyman sheet metal worker; sheeter/decker, welder, sheeter's assistant and material handler in the sheeting and decking segment of the sheet metal industry, recognized by the local union and employed or eligible to be employed by an employer in the shop or on the job site.

Article 8 — Union Security

8.1 The employer agrees it shall be a condition of employment for all employees covered by the terms of this Agreement, to be a member of, and to maintain membership in good standing, in one of the local unions.

Article 21 — Hiring Procedure

21.2 Whenever after reasonable notice, (48 hours) excluding Saturdays, Sundays and Holidays, the local union is unable to furnish a sufficient number of such duly qualified members and registered apprentices recognized by the Union, to meet the requirements of the employer, then the employer may secure such additional sheet metal workers from other sources as may be necessary, it being understood that they shall be eligible and shall comply with the requirements of the Union and thus become covered by the terms of this Agreement.

In the union's submission, section 57(2) makes membership in the "bargaining unit defined in a collective agreement" a prerequisite for a termination application. Here, it argues, the bargaining unit is defined in terms of union membership which is made compulsory by Article 8.1. Since the applicants are not members of the union they cannot be considered to be employees in the bargaining unit. In other words, the union asserts that the bargaining unit is defined in terms of union membership rather than employment status and craft skills, so that neither a non-member, nor an individual who ceases to be a member in good standing can be considered to be an employee in the bargaining unit. We have difficulty accepting this submission, given the way in which the union acquired the right to represent Culliton's employees. And we note that this collective agreement does not contain a recognition clause (which it should have) expressly defining the bargaining unit which the union represents.
Section 137(l)(e) of the Act provides that a provincial agreement is a document which prescribes the obligations of an employer "for those employees the affiliated bargaining agents hold bargaining rights". It also prescribes the rights of "the employees represented by the affiliated bargaining agents and employed in the industrial, commercial and institutional sector" of the construction industry. There can be only one such provincial agreement "affecting employees represented by affiliated bargaining agents" (see section 146). By virtue of section 147, the provincial agreement is binding, inter alia, on "the employees represented by the affiliated bargaining agents". By virtue of section 137(2), an employer is "deemed" to have recognized the geographically defined local affiliated bargaining agents as the representatives of its employees working in the ICI sector in their respective geographic jurisdictions (see also section 145(4)). Once a union has acquired bargaining rights by means of this "deemed" voluntary recognition, the statutory scheme suggests that the provincial agreement applies to all of its activities and employees. (See section 145.)
The only reason why Culliton could be bound by the provincial collective agreement is that it was "deemed" to recognize the union's position throughout Ontario and the union was "deemed" to have bargaining rights for and represent Culliton's employees. But the statutory scheme appears to contemplate that where a union has bargaining rights for or represents employees, the provincial agreement necessarily applies. In this context, it seems anomalous to suggest that the union has bargaining rights for, represents, employees outside Board Area No. 31, but that those employees are not part of the bargaining unit to which the provincial collective agreement applies. We do not think that the Legislature contemplated the creation of a body of employees represented by the union but outside the scope of the provincial collective agreement, nor would such employee group fit easily into the integrated scheme. Why would the Legislature seek to create a group of employees, previously unorganized, who are now deemed to be represented by the union but are not covered by the collective agreement which applies automatically to any other employees for whom the union has bargaining rights? It does not make sense; and to the extent that this denies the "swept-in" employees the benefits of collective bargaining, and subjects them to the prospect of termination and replacement by others it is arguably unfair.
Another example may clarify the difficulties with the union's position. Suppose on a simple application for certification the Sheet Metal Workers' Union has the support of 75% of the employees in its craft bargaining unit. It would then be certified and, by operation of law, the employer becomes bound by the provincial agreement. But section 144(1) defines the bargaining unit for certification purposes as including "all employees who would be bound by a provincial agreement". Is the non-member minority excluded from the unit and collective bargaining because they are not members of the union and outside the scope of the provincial agreement which is defined in terms of union membership? In this common scenario, must one hold that the minority, who were clearly in the unit for certification purposes, are not covered by the provincial agreement because its bargaining unit is defined in terms of union membership? It would take the clearest possible contractual language to compel this conclusion as to the parties' intentions. One must also remember that at the time section 137(2) extended the union's bargaining rights they were based upon and flowed from the collective agreement rather than the certificate issued some years before. Again, it would be curious to suggest that these bargaining rights were not extended, because the collective agreement could not be extended to other employees.
The present situation provides a case in point. Here the union had no members at all. Culliton had no employees working in Board Area No. 31 and had not been active in that area for several years. None of the employees "swept in" by section 137(2) had ever indicated any desire for trade union representation. Should we conclude that on May 1, 1980 the union not only acquired the right to represent them, but also that they should be denied the fruits of that representation until such time as they sought and were accepted into membership? On this view, for practical purposes, the province-wide bargaining scheme has not been extended at all. It simply opens the possibility of replacing longstanding employees with members of the union. We do not think that that was the legislative intention and, in this respect, we agree with the result set out in the second decision of the Board in the previous proceeding. (See paragraph 37, where the Board found that the employees were "employees in the bargaining unit of the provincial agreement and were bound by it")
In our view, when the non-union employees of Culliton were swept into the province-wide bargaining scheme, it was intended that they be regarded as employees in the bargaining unit defined in the agreement and possessing all of the rights, privileges, and obligations of any other employee under the Act represented by the union. If they did not join the union they could be terminated, because that is what the agreement required. But as employees in the bargaining unit they could also seek a termination of the union's bargaining rights in accordance with the provisions of section 57. And, as we have already noted, it would take the clearest possible language to drive us to the conclusion that the parties to the provincial agreement intended that craftsmen for whom the union has acquired bargaining rights and who are eligible for union membership should not be treated as part of the bargaining unit covered by the collective agreement — although, again, as employees bound by the agreement they may have to join. We do not think the contractual language here goes this far.
The union places primary reliance upon the decision of the Board in April Waterproofing (cited sup ra). There, the Board had before it a "displacement" certification application, where the support for the raiding union came from two employees who had been recently hired "off the street" contrary to the terms of the incumbent union's collective agreement. That collective agreement required that all new employees should be members of the incumbent union hired through the incumbent union's hiring hall. In April Waterproofing, however, the company had breached this contractual obligation, and, in so doing, had acquired two employees who were adherents of a rival union. The hiring of these two employees was improper from its very inception, yet they purportedly provided the basis for the raiding union's attack upon the incumbent union's bargaining rights. In determining that these employees who had been hired contrary to the terms of the collective agreement were not lawfully in the bargaining unit, and should not be treated as employees in the unit for the purpose of section 7(1) of the Act, the Board made the following observations:
The basis of the intervener's challenge to the three individuals in dispute is the admitted fact that a few days prior to the filing of the application, the respondent hired them directly without going through the intervener's hiring hall contrary to the provisions of the collective agreement binding upon the respondent and the intervener. Under the terms of the collective agreement, the respondent is required to inform the union of its manpower requirements, and only if the intervener cannot supply sufficient of its members to do the work involved is the respondent free to hire manpower directly. The intervener's contention is that the respondent, acting with the knowledge of the applicant, hired the individuals in dispute so as to enable the applicant to file an application for certification. This contention is disputed by both the applicant and the respondent. The respondent's position is that the person who hired the disputed individuals was simply not fully aware of the hiring provisions in the collective agreement. At the hearing the parties indicated they were not in a position to lead evidence with respect to the respondent's motivation in hiring the disputed individuals, but they would do so at a later date if the Board considered it a relevant factor in its determination.
The intervener contends that since the applicant has membership support only among employees hired contrary to the terms of the collective agreement the application should either be dismissed, or in the alternative, the ballots cast by the individuals in dispute in the pre-hearing representation vote not be counted. The applicant contends that although the individuals in dispute were hired contrary to the terms of the collective agreement, nevertheless, at the relevant time they were employees of the respondent and accordingly the Board should now direct the counting of all the ballots cast in the vote.
Employment patterns in the construction industry differ from those in most other industries. One major difference is that the manpower requirements of most construction firms fluctuate greatly over relatively short periods of time. Not only do different projects require different size work forces, but frequently the number of tradesmen required on any particular project will vary depending on the stage of development of the project. Employment levels also vary because of cyclical and seasonal fluctuations in construction activity. For their part, most construction tradesmen are required to work for a succession of different employers. These factors have resulted in the negotiation of collective agreement terms which are unique to the construction industry. This fact is recognized in the following excerpt from the judgment of the Ontario Court of Appeal in Re Blouin Drywall Contractors Ltd. and United Brotherhood of Carpenters and Joiners of America, Local 2486, (1975), 1975 CanLII 707 (ON CA), 8 O.R. (2d) 103 at p. 112:

In this industry, there is no continuing employment and so collective agreements have developed to ensure a source of labour to the contractor, to provide for preference in the employment of trade union members and, while establishing the terms and conditions of such employment, to provide other benefits which may become due or payable at a time when the union member is not employed.

The displacement of one union's bargaining rights by another is by no means rare in the construction industry. Such cases generally involve situations where the applicant union has won over the allegiance of members of the incumbent union who were hired by the employer in accordance with the provisions of the incumbent's collective agreement. The instant case, however, involves an entirely different situation. Here, the respondent did not hire the three individuals in dispute through the intervening union as required by the terms of the relevant collective agreement, but rather, it hired them "off the street". The applicant in turn seeks to displace the intervener's bargaining rights on the basis of the fact that two of the individuals so hired are its supporters.
There can be little doubt but that at the relevant time there existed a common-law employee-employer relationship between the respondent and the three individuals challenged by the intervener. That by itself, however, is not determinative of their status as bargaining unit employees. See [Local 273, International Longshoremen's Association v. Maritime Employer's Association, 19791 1978 CanLII 158 (SCC), 1 S.C.R. 120. In our view, the bargaining unit is comprised of employees employed under the terms of the applicable collective agreement. To be so employed, an employee must have been hired in accordance with the provisions of the agreement. The three individuals in dispute were not hired in accordance with the provisions of the collective agreement and accordingly, in our view, they do not come within the bargaining unit covered by the collective agreement. This being so, we are satisfied that in ascertaining the number of employees in the bargaining unit for the purposes of section 7(1) of the Act, the three individuals in dispute should not be taken into account.
This approach was subsequently adopted in Cooper Construction, supra. It must be noted it does not require advertent misconduct on the part of the employer. Although in April Waterproofing it was alleged that the employer had intentionally hired the two employees to foster a raid, the Board did not hear evidence on, or determine, that issue. April Waterproofing stands for the proposition that employees illegally hired contrary to the terms of an existing collective agreement should not be considered employees in the bargaining unit even though their hiring was inadvertent and not intended to foster a representation application. The fact that the employer may not have intentionally breached its contractual obligations is no answer to the prejudice which his actions may cause.
The problem raised in April Waterproofing is understandably a difficult one given the transitory nature of employment in the construction industry, and the ease with which an employer's hiring practices can alter the composition of the bargaining unit, and undermine established bargaining rights. If an employer intentionally or unintentionally fails to abide by its legal obligation to hire union members, it is relatively easy to create a situation where non-members — albeit perhaps only temporarily — will be in a position to seek termination of the union's bargaining rights or representation by another union. Union members may be denied the opportunity for present and future employment because of the activities of individuals who should not have been hired at all. The potential for abuse, and the obvious unfairness of putting a union's rights at risk because of the views of individuals who should not even be there, underlies the Board's decision in April Waterproofing. Why should the rights of union members turn on the speed with which the union can compel enforcement of the collective agreement to eliminate non-members whom the employer has unlawfully employed? Should the union's rights turn on whether it can require compliance with the agreement through a proceeding under section 124 more quickly than the employees whom it seeks to eliminate can file a termination application under section 57?
The approach in April Waterproofing recognizes the need to accommodate individual and institutional rights in a way which is faithful to the statutory parameters within which the Board must operate, yet is also sensitive to the requirements of labour relations policy and orderly collective bargaining. No doubt similar considerations influenced the Courts in Blouin Drywall and Maritime Employer's Association which were referred to in April Waterproofing. In Blouin Drywall, the Ontario Court of Appeal held that a potential employee in a union hiring hall had certain inchoate employment rights under a collective agreement even though no common-law employment relationship existed. Similarly, in Maritime Employers' Association, the Supreme Court of Canada determined that a concerted refusal to refer workers from a hiring hall constituted a strike even though, again, the individuals in question were only potential employees. In both cases the Court acknowledged that common-law employment considerations did not appropriately capture the collective bargaining reality.
So did the Board in April Waterproofing. The Board recognized that under the Act contractual rights and statutory rights are intertwined so that in some circumstances the employer's abrogation of the former could irreparably prejudice the latter. Individuals improperly hired could repudiate the statutory rights of those who should have been hired. In the Board's view, this result was inconsistent with the intended meaning of the opening words of section 7, and the statute was interpreted in that light. Of course, the Board might equally have said that it would not schedule a representation vote until the composition of the bargaining unit was in accordance with the legal requirements of the collective agreement; however, the Board considered it more appropriate and direct to treat individuals improperly hired (i.e., in the bargaining unit contrary to its contractual requirements) as not being members of the bargaining unit for the purposes of a representation application.
There can be little doubt that if an employer, in contravention of its contractual obligations, hires particular employees in order to foster a representation application, he will be breaching section 64 of the Act which prohibits employer interference in the formation, selection, or administration of a trade union. Indeed, where an employer has retained in its employ individuals who have been illegally hired, there may well be an onus of explanation cast upon the employer to satisfy the Board that it did not continue the employment of the disputed individuals "artificially" for the purpose of influencing a potential representation application or representation vote. For example, in Custom Aggregates, [1978] OLRB Rep. March 215, the Board determined that a new vote should be held where an employer artificially kept certain strike replacements employed because they were likely to vote against a union in a termination application.
Section 89 offers one remedy for such abuses. There are others. Where the employer has fostered a raid by hiring adherents of a rival union, the Board will probably raise a "section 13" bar on the grounds that the raiding union has been the recipient of employer support. And where the employer action has resulted in a termination application, the Board may consider both its powers under section 89, and its general authority with respect to the timing, composition, and even number of required representation votes. To these express propositions, the Board adds one more by virtue of its decision in April Waterproofing: where the composition of the bargaining unit defined in the collective agreement is contrary to its terms because of the actions of the employer party, the Board will not consider the individuals improperly engaged to do bargaining unit work, as properly part of the unit for the purpose of a representation application. Individuals illegally hired, transferred or retained in the bargaining unit should have no more right to bring a representation application or vote in it, than they would have if they had been properly engaged in accordance with the terms of the applicable collective agreement, or if the Board had postponed a determination of their rights in a representation application until the composition of the bargaining unit is returned to what it should be.
The instant case, however, does not exhibit the "mischief' with which the Board was concerned in April Waterproofing. The employer here has not hired persons contrary to the terms of a collective agreement, improperly transferred individuals into the unit contrary to the agreement, or engaged in other activities which undermine the contractual rights of union members under the agreement by which the employer is bound. Here, the subject employees were not "hired" at all. The individuals affected were pre-existing employees who were swept into the ambit of collective bargaining by operation of law. Nor is this a case where the employer has manipulated its employee list, withheld information from the union or the Board, or sought to mislead the union with respect to its employee complement to gain the advantages of unionization, only to take a different position in a subsequent termination application. There was no positive action by the employer here which would raise any concerns or call into play the reasoning of the Board panel in April Waterproofing. And, given the uncertainty surrounding the rights and status of the individuals affected by this application, we are not prepared to conclude that the fact that Culliton kept them in its employ constitutes improper interference or support which prejudices their right to seek termination of the union's bargaining rights. While there may be cases where the retention of employees, despite a challenge to their status, may warrant careful scrutiny by the Board lest the employer is "padding the list", we are not convinced that this is one of them. Nor are we satisfied that the approach in April Waterproofing should be adopted here.
For the foregoing reasons, the Board finds that the five individuals named on the employee list filed by Culliton are employees in the bargaining unit within the meaning of section 57(2) of the Act. The Board is further satisfied that no less than forty-five per cent of such employees have voluntarily signified in writing that they no longer wish to be represented by the union. It is entirely understandable why these employees would be opposed to trade union representation which was not only thrust upon them unwillingly, but also involved in initial effort by their bargaining agent to have them all fired. Their negative reaction is hardly surprising.
Pursuant to section 57(3) of the Act, a representation vote will therefore be directed among such employees so that the Board may satisfy itself by that means that the majority of the employees desire that the right of the trade union to bargain on their behalf be terminated. Finally, the Board notes that all of the subject employees are now members in good standing of the union so that no question here arises about postponing the taking of the representation vote until the composition of the bargaining unit is in accordance with the requirements of the collective agreement.
A representation vote will be taken among the employees. Those entitled to vote will be all journeymen and sheet metal apprentices in the employ of Culliton in the industrial, commercial and institutional sector of the construction industry in the Province of Ontario, save and except non-working foremen and persons above the rank of non-working foreman, on the date hereof, who do not voluntarily terminate their employment or who are not discharged for cause between the date hereof and the date on which the vote is taken.
The matter is referred to the Registar.

DECISION OF BOARD MEMBER H. KOBRYN;

This is a construction industry case dealing with extension of bargaining rights which involves persons who are employed by an employer bound by the provincial agreement of the Ontario Sheet Metal Workers' Conference who were not members of the union that is the bargaining agent at the time of their application for termination of this union's bargaining rights.
First and foremost, we have no Rand formula in the construction industry and this is confirmed by section 43(1) which reads as follows:

Except in the construction industry and subject to section 47, where a trade union that is the bargaining agent for employees in a bargaining unit so requests, there shall be included in the collective agreement between the trade union and the employer of the employees a provision requiring the employer to deduct from the wages of each employee in the unit affected by the collective agreement, whether or not the employee is a member of the union, the amount of the regular union dues and to remit the amount to the trade union, forthwith.

(emphasis added)

The Legislature, by putting in that exclusion to the construction industry in section 43, recognized that the construction trade unions did not require this provision because all their present agreements included the close shop provision.

Where the trade union is the bargaining agent for the employees, all employees have to be members of that trade union to be in the bargaining unit, as a condition of employment.
There is no doubt that section 137(2) extended the bargaining rights of the union — same is quoted below:
-(2) Where an employer is represented by a designated or accredited employer bargaining agency, the employer shall be deemed to have recognized all of the affiliated bargaining agents represented by a designated or certified employee bargaining agency that bargains with the employer bargaining agency as the bargaining agents for the purpose of collective bargaining in their respective geographic jurisdictions in respect of the employees of the employer employed in the industrial, commercial and institutional sector of the construction industry referred to in clause 117(e), except those employees for whom a trade union other than one of the affiliated bargaining agents holds bargaining rights.

(emphasis added)

There is also no doubt that once the trade union has obtained bargaining rights all the employees of the employer become bound by the provincial collective agreement of the union. This is confirmed by section 145(4) set out below:

(emphasis added)

Section 147(2) confirms upon whom the provincial agreement is binding:

(emphasis added)

What is a provincial agreement? This is best explained in Manacon Construction Limited [1983] OLRB Rep. Mar. 407, at para. 35:

A provincial agreement is, by definition, a collective agreement which, amongst other things, contains provisions respecting the rights, privileges or duties of . . . the affiliated bargaining agents represented by the employee bargaining agency,..." and provisions respecting terms or conditions of employment of"... the employees represented by the affiliated bargaining agents and employed in the [ICI] sectors . . .". Thus a provincial agreement deals with the bargaining rights held by affiliated bargaining agents represented by their employee bargaining agency. In turn, the first requirement of the definition of "affiliated bargaining agent" in section 137(l)(a), as noted at paragraph 46, is that it be a bargaining agent that ..... according to established trade union practice in the construction industry, bargains separately and apart from other employees .. ." From reading these two definitions together, and in the context of the requirement of section 144(1) that the unit of employees shall include all employees who would be bound by a provincial agreement . . .

(emphasis added)

Who can apply for termination of bargaining rights of the employee bargaining agency or the affiliated bargaining agents? We must go to section 57(2) which is quite specific for the answer.
-(2) Any of the employees in the bargaining unit defined in a collective agreement may, subject to section 61, apply to the Board for a declaration that the trade union no longer represents the employees in the bargaining unit, ...

Now who are the employees in the bargaining unit defined in a collective agreement? We know that the provincial agreement is a collective agreement and we know that this employer is bound by this collective agreement. How are employees defined in this collective agreement between this employer and this union?

ARTICLE 2 - DEFINITIONS

In this Agreement:

Article 8 — Union Security

(emphasis added)

From the above definitions in the collective agreement, the employees of the employer who brought this application for termination were not members of the bargaining unit defined in the collective agreement at the time the application was made. Section 137(2) is basically the key to this case, as it extended the bargaining rights of the union to the whole province and this in turn bound the employer and the employees to the provincial agreement. This point was argued by the employer before the Court in Inducon Development Corporation in the Supreme Court of Ontario, Division Court before Southey, Callaghan, Fitzpatrick, J.J., released February 2, 1983 at pp. 13, 14:

"Turning to section 137(2) of the Act. The applicants submit that the interpretation given to this section by the Board is patently unreasonable in that, again, violates a fundamental principle of the Act that ensures employers' freedom to be represented by an employer's organization of choice (Section 4). Section 137(2) was enacted by the Labour Relations Amendment Act, 1979, S.O. 1979, c. 113. It is part of a legislated scheme of provincial-wide bargaining in the ICI sector of the construction industry which was first introduced by the Labour Relations Amendment Act, 1977, S.O. 1977, c. 31. Section 173(2) is a specific enactment designed to effect a province-wide extension of bargaining rights of all affiliated bargaining agents of the Carpenters and others in the ICI sectors. Its invocation is premised on the existence of local area bargaining rights. In this case the Board has found that such rights originated with the collective agreement between Local 1669 and ICCL which terminated 30 April, 1973. The finding that these rights were not abandoned is the threshold decision and it is a decision within the Board's exclusive jurisdiction. See Carpenters' District Council of Lake Ontario and Hugh Murray (1974) Limited and John Entwistle Construction Limited, (1980) 1980 CanLII 1826 (ON HCJ), 33 OR. (2d) 670 per Southey, J. at 667. This finding was not questioned in this Court. It is a finding based in part on the Board's understanding of the body of jurisprudence that has developed around the collective bargaining system in the construction industry. Absent attack on that finding, the provisions of Section 13 7(2) apply automatically by operation of law, and, the Board is given discretion in limiting the province-wide application thereof. The interpretation is not patently unreasonable, given the wording of section 13 7(2). The legislature has provided that "the employer shall be deemed" to have recognized all the affiliated bargaining agents represented by a certified employee bargaining agency. While an employer might well consider this provision an interference with its rights to collective bargaining with a freely designated representative of its employees the legislature has seen fit to limit that right in the interests of attempting to make collective bargaining responsive to the needs of the construction industry. This section in effect provides that if an employer is bound by a provincial collective agreement anywhere in the province, that employer is now bound everywhere in the province to that agreement where it employs persons in the trades in the ICI sector of the construction industry. This is an essential part of a scheme of legislation to provide effective province-wide bargaining leading to a provincial agreement in this sector of the industry.

Section 137(2) was challenged in the Court, and the Court found that the Board's interpretation of this section was not patently unreasonable given its wording. The Court went on to say that absent attack on that finding (that bargaining rights had been abandoned), the provisions of section 137(2) apply automatically by operation of the law. The Court further commented that while the employer might well consider this provision an interference with its rights to collective bargaining with a freely designated representative of its employees, the Legislature has seen fit to limit that right in the interests of attempting to make collective bargaining responsive to the needs of the construction industry. These same limitations of these rights apply to unions and employees in the ICI sector of the construction industry as confirmed in Manacon Construction Limited, supra.
By the automatic operation of the law, this employer was bound by the provincial agreement of the union, and the persons he employed were also bound by the provisions of the provincial agreement. These persons employed by this employer made no effort to comply with the terms of this provincial agreement, even though they were advised by the employer on April 5, 1982 to do so. Instead, these persons went to seek counsel and then filed an application for termination of union's bargaining rights on April 26, 1982, when they were not members of the union's bargaining unit as defined in the provincial collective agreement and as specifically required by section 57(2). Since they were not members of the union's bargaining unit at the time this application was made, I find that this application is untimely and it should be dismissed.